Defamation in the World of Online Reviews

Business owners and professionals of all kinds do not need to be told how damaging a negative online review can be.  Online reviewers can impact a business more than ever in today's digital world and no one is policing what customers post online or how truthful it is. All it takes is a cell phone and in a few minutes a review, truthful or not, can be permanently posted for all to see.

Consider the following scenario: a Yelp reviewer claims a small Texas business owner was rude to her and was completely disinterested in her customers.  That business owner claims this review is completely untrue, yet it is prominently displayed with each internet search of the company and the owner has noticed a decline in her business.  The owner suspects the reviewer was not even an actual customer.[1]

While negative reviews such as this may be hurtful, do they amount to defamation?

Generally, defamation claims are only available for statements of fact as opposed to opinion. The victim of the defamation also has to prove they were harmed by the defamatory statements, which in the above scenario requires an actual causal link between the decline in business and the posting of the negative review.[2] And truth is an absolute defense to defamation, even substantial truth if the average reader would not find it more damaging to the plaintiff's reputation than the actual truth.

In considering these factors, courts and the legislature alike have made it difficult to succeed on a defamation claim for an online review, often treating these lawsuits as attempts to silence a customer's freedom of speech.

ANTI-SLAPP STATUTES

For the legislature's part, almost each state has passed its own anti-SLAPP statute or Cyber-SLAPP statute as they are commonly referred.  These statutes pertain to "strategic lawsuits against public participation" and were created to protect free speech that might be stifled by the threat of costly litigation over something as basic as a negative sandwich review.

Texas originally codified its anti-SLAPP statute on June 17, 2011 and further clarified and strengthened the statute effective June 14, 2013.[3] Under the statute, the burden of proof is initially on the party who filed the anti-SLAPP motion (the online reviewer) to establish by a preponderance of the evidence that the lawsuit was filed in response to the exercise of his/her First Amendment rights. Then the burden shifts to the plaintiff to establish by clear and specific evidence a prima facie case for each essential element of the defamation claim. The statute provides for mandatory fee-shifting when a party wins an anti-SLAPP motion so that the person or entity wrongfully filing a lawsuit must pay the other side's defense costs. There is also a discretionary fee award if the court finds that the anti-SLAPP motion was frivolous or brought solely for the purpose of delaying the proceedings. The statute provides an immediate right to an expedited appeal if the anti-SLAPP motion is denied.

In addition, most anti-SLAPP statutes allow for sanctions against the party who brought the defamation action if necessary to deter the party from bringing similar actions in the future.  Washington State’s anti-SLAPP statute even provides for mandatory sanctions of at least $10,000.[4]

A Dallas District Court was one of the first to apply the Texas anti-SLAPP statute and it granted the statute and awarded sanctions.  The case involved negative online comments posted about a mortgage company and the company sent threatening emails to the reviewers to take the comments down.  The Court dismissed the lawsuit under the anti-SLAPP statute and in addition to granting attorneys' fees to the reviewers, awarded $15,000 in sanctions against the mortgage company to deter it from bringing similar lawsuits in the future.[5]

IDENTIFYING THE REVIEWER

Identifying the defendant to name in a defamation case for an online review is no easy task in itself. Section 230 of the Federal Communication Decency Act grants interactive online news websites, blogs and forums broad immunity from legal liability for defamation or privacy claims stemming from content created by others. So the only recourse is against the actual reviewer.  But in many cases the user that actually posted the negative review or comment did so with a pseudonym or completely anonymously, leaving the identity unknown to the harmed business.

The United States Supreme Court has repeatedly recognized an individual's right to speak anonymously and has applied those protections to the internet. However, the right to speak anonymously is not absolute and must be weighed against a business' right to seek redress for alleged wrongs. As noted in the scenario at the beginning of this article, when negative reviews are posted anonymously, businesses often suspect the authors of being competitors or others with sinister motives whose speech should not be protected.

Courts nationwide have differed in what showing they require before allowing a business to obtain the identity of an anonymous online commenter, with some requiring little more than a good faith basis for the request. But most courts have settled on a similar standard commonly referred to as the Cahill test, which requires 1) the plaintiff to provide the court with sufficient evidence to establish a prima facie case of defamation for all elements of defamation within plaintiff's control; 2) the plaintiff provide sufficient notice to the anonymous posters that they are the subject of an application to disclose their identify; and, 3) that the plaintiff identify the exact statements, which allegedly amount to defamation. Element number one takes into account that without knowing the identity of the online reviewer, it would be almost impossible to provide evidence of all potential elements of a claim, such as malice, which may be established if it is shown a competitor and not a customer wrote the review.

In applying the Cahill test, courts balance the defendant's right to anonymous free speech with the prima facie case of defamation presented by the plaintiff.  Historically, courts have typically favored protecting the identities of online commenters. But one of the first major cases ordering the disclosure of user names occurred in Texas and required the disclosure of 178 user identities. The 2009 lawsuit involved an attorney and his wife against "anonymous commenters who accused them of being sexual deviants, molesters, and drug dealers" on the website Topix, once self-described as 'the country's largest local forum site."  The couple had been criminally accused of sexual assault but were both acquitted and they then filed suit against the online commenters.  The Court ordered Topix to disclose the users' identities, which resulted in a multitude of initial defendants, which were later whittled down to four individuals and two businesses by the time of trial.  A jury ultimately found for the couple and awarded an attention-grabbing $13.78 million verdict. However, the Court found the judgment notwithstanding the verdict and reduced the judgment to $0.[6]  This matter is currently on appeal before the Texas Supreme Court. While it remains unclear if this case will offer any penalty for the online commenters accused of the defamation, the fact that the Court ordered the disclosure of their names remains significant in the realm of online reviews.

A January 7, 2014 opinion from the Virginia Appellate Court has also garnered significant attention regarding the discoverability of online identities.[7]  The Virginia Court allowed a carpet cleaning service to discover the identities of online Yelp reviewers upon declaratory evidence that it suspected competitors made the comments solely because it could not connect the online criticisms to actual customers. However, this opinion was based upon a Virginia specific statute that allows a plaintiff to seek the disclosure of online identities if there is a "legitimate, good faith basis to contend" the anonymously posted content was defamatory. While some legal commentary believe this case signifies a turning of the tides for the ease of obtaining the disclosure of online identities, no other state has a similar statute making it unlikely the case will make any significant impact nationwide.

REMOVING DEFAMATORY CONTENT POSTED ONLINE

In the event a business is successful in its defamation claim against an online reviewer, that does not necessary mean the review will be taken down. Rather, the attention from the lawsuit may drive far more viewers to read the review, which could remain online indefinitely.

In offline defamation cases, even after a statement is found to be defamatory, permanent injunctive relief is not available to prevent the defendant from ever repeating the defamatory statement again in the future. Such an order is considered a prior restraint on speed, which is unconstitutional.

The Texas Supreme Court is currently presented with its first opportunity to establish whether the rule against permanent injunctions in defamation cases will be upheld in the internet age or whether defamatory content can be ordered removed from the internet.[8] The case does not involve an online review but rather an employer who allegedly posted defamatory remarks about a former employee in an online blog post.  A Travis County trial court initially dismissed the case, ruling that removing content from a website, even if it is false, is an “impermissible” prior restraint on speech. The 3rd Court of Appeals upheld the dismissal in 2012. If the Supreme Court reverses the lower courts' rulings, the case could give Texas courts the power to order the removal of false statements from the internet.

CONCLUSION

The hurdles to establish a defamation case with an online review should not be underestimated.  The initial difficulty with identifying the online reviewer may be enough to chill a business' desire to defend its good name from negative online reviews, even when the reviews are wholly untrue. But the age of posting anything and everything to the internet without any consequences is coming to an end as courts give more weight to individuals' and businesses' needs to protect their reputations and the value in their brand names, particularly in regards to the speed at which information travels online.

[1] This was a real life scenario as reported in the Dallas Morning News. Dave Lieber, Texas business owners say negative comments on Yelp hurt bottom line, DMN,  Nov. 7, 2013.

[2] Establishing such a connection will often require the use of a potentially costly expert witness.

[3] Texas Civil Practice & Remedies Code, Chapter 27.

[4] See Wash. Rev. Code 4.24.525.

[5] American Heritage Capital, LP v. Gonzalez, No. DC-11-13741-C (68th Tex. Dist. Ct-Dallas, April 13, 2012).

[6] Lesher v. Doescher, 2012 WL 2377543 (348^th Tex. Dist. Ct- Tarrant Cty, June 8, 2012); aff'd __ S.W.3d___, 02-12-00360- CV (2^nd Tex. App. Oct. 10, 2013, pet. filed.)

[7] Yelp v. Hadeed Carpet Cleaning Inc., 752 S.E.2d 554 (Va. Ct. App. Jan. 7, 2014).

[8] Kinney v. Barnes, 03-10-00657-CV, 2012 WL 5974092 (Tex. App.-Austin Nov. 21, 2012, pet. granted).

Anti-SLAPP Statutes, skrumholz