Yelp review lawsuit is much more important than most realize



Defamation. Freedom of speech. Honesty and transparency versus lies and coverups. These and other gray matters are all in play in a $750,000 lawsuit filed by a Virginia contractor against a former customer who left a scathing review on review sites Yelp and Angie’s List. If it gets settled in court, the ramifications will be felt by both the review industry as well as millions of small businesses around the country.

If Christopher Dietz, owner of Dietz Development LLC, wins the lawsuit, many consumers will become fearful of posting reviews that call out businesses. If Jane Perez, the woman who wrote the reviews, gets out of the lawsuit unscathed, reviewers will be empowered to use reviews as a way to damage the reputation of businesses they don’t like. There is more hanging in the balance of this lawsuit than a contractor’s lost business revenue and an unhappy customer’s right to tell her story. This will set a precedent in an arena that is devoid of clarity.

It’s not just an issue between the two parties. It’s something that will change the review industry, the small business atmosphere, and the power of consumer transparency regardless of which way the lawsuit goes.


The negatives if Dietz wins

In many ways, small businesses are held hostage by review sites. Savvy business owners are forced to monitor and in many cases manage their online reputation to avoid reviews that can hurt their bottom line. When bad reviews pop up, they must respond swiftly and go into damage-control mode; 70% of consumers claim to trust user generated online reviews. In the Virginia case, Dietz claims that he has lost over $300,000 in business because of the review itself, particular the portion that insinuates that he was connected to the theft of jewelry from the house. This portion of the review as well as a portion that improperly defines summary judgment were removed from the reviews by order through a preliminary injunction from the court.

It’s a minor victory for Dietz, but not enough to offset the defeat he’s already forcing upon his business. Other reviews are popping up now that discuss the lawsuit itself. These will certainly damage his business, possibly more than the original review, and because the statements are indisputable, they will not be removed. Here are some of the ones currently up on the site:

Bad Reviews

Despite the negative press that his business is getting, it is nothing compared to the damage that will be done to the review industry if he wins the lawsuit. The best thing going for review sites is that they offer an outlet through which businesses can be held accountable. “Word of mouth” has been replaced in recent years by “word of mouse”. It has put businesses on the defensive, but it has also forced them to change many practices that were once relatively harmless but that could cause major problems today.

Review sites such as Yelp rank very well in Google for business names, giving people an easy way to discover from other consumers how the company operates their business and treats their customers. Setting a precedent that businesses can win lawsuits against reviewers will discourage a large percentage of people who may want to speak out but who don’t want to go through the hassle and potential damage they may incur by writing a bad review. They will be burdened with the need to prove their claims. It will weaken both the power and validity of reviews altogether, hampering the already-crowded industry and removing a powerful tool that consumers currently use to keep each other informed.


The negatives if Perez wins

Today, businesses must constantly “watch their backs” online. Some have been forced to train their employees to try to ensure strong reviews. Others hire outside firms to handle their online reputation. If Perez comes out of this without paying money or removing her post, freedom of speech has officially trumped defamation and a precedent will have been set.

On the surface, this will appear to be a good thing. The ugly head of censorship that has been popping up around every corner will have been dealt a blow. Unfortunately, the freedom to post damaging, defamatory reviews without fear of repercussions will also be more in play than it is today. Word will spread that the customer is always right, even on review sites. An atmosphere of “seller beware” will prevail and grow.

It won’t last long. The media will soon after shift its focus and start highlighting the poor businesses that are damaged by fake reviews. They will find small business owners who are all too willing to tell their story of the review blackmail and “social terrorists” who have ruined their business.

In the end, if Perez wins, regardless of whether her initial claims were warranted or not, the online review system will become less powerful. It will gain its own reputation of being untrustworthy and consumers will have lost an important tool.


This must be resolved outside of court

The only way that this whole situation won’t end badly is if there is no precedent set. Right now, we’re in a review world of blissful ignorance. Consumers trust them because they’re all that we have. Businesses must abide by them because their customers are now empowered. It’s far from a perfect system and will continue to improve, but once the government and judicial systems step in and find for one side or the other, everything changes for the worse. For once, it’s best to let this beast stay hidden, to let each individual instance of fallacy on either side sort itself out.

If this comes to judgment, the results will be a bad one for everyone involved regardless of who wins. In the end, we all lose.

  1. This article’s conclusion is fallacious.

    “The only way that this whole situation won’t end badly is if there is no precedent set.” Excuse the vernacular, but bullshit. THE FACTS OF THE CASE ARE WHAT MATTERS. Was jewelry stolen? Can it be proven? Did the review actually state that the contractor was responsible for the theft, or did it merely state that things “went” missing?

    All of these questions and more are much more key to the effects of the case result than simply “who won?” For example, if jewelry was actually stolen AND it can be proven, there is no question of libel because it is a statement of fact. If Perez coincidentally lost (or worse) the jewelry in the same timeframe, it matters whether or not she actually claimed the contractor was responsible (or whether or not she insinuated strongly enough so that a reasonable person would attribute it to them) because then it is no longer a statement of fact and, therefore, potentially libelous.

    And this just scratches the surface. Obviously, there is far more to this case than simply “If Party A wins then Effect A happens, if Party B wins then Effect B happens.”

    FWIW, I’m not an attorney – just some jerk on the internet with a strong opinion. Do your own research and make your own decision. But in my (albeit strong) opinion, this post is overly simplistic and isn’t considering all of the factors.

  2. A Minnesota case had a precedent set at the state Supreme Court level.

    Article by: ABBY SIMONS , Star Tribune, Updated January 30, 2013 – 9:59 PM

    Finding no harm done, justices toss out lawsuit by Duluth physician.

    Dennis Laurion fired off his screed on a few rate-your-doctor websites in April 2010, along with some letters about what he saw as poor bedside manner by his father’s neurologist. He expected at most what he calls a “non-apology apology.”

    “I really thought I’d receive something within a few days along the lines of ‘I’m sorry you thought I was rude, that was not my intent’ and that would be the end of it,” the 66-year-old Duluth retiree said. “I certainly did not expect to be sued.”

    He was. Dr. David McKee’s defamation lawsuit was the beginning of a four-year legal battle that ended Wednesday when the Minnesota Supreme Court ruled the doctor had no legal claim against Laurion because there was no proof that his comments were false or were capable of harming the doctor’s reputation.

    The unanimous ruling reverses an earlier Appeals Court decision and brings to an end the closely watched case that brought to the forefront a First Amendment debate over the limits of free speech online.

    It’s a frustrating end for McKee, 51, who said he’s spent at least $50,000 in legal fees and another $11,000 to clear his name online after the story went viral, resulting in hundreds more negative postings about him — likely from people who never met him. He hasn’t ruled out a second lawsuit stemming from those posts.

    “The financial costs are significant, but money is money and five years from now I won’t notice the money I spent on this,” he said. “It’s been the harm to my reputation through the repeated publicity and the stress.”

    He said he offered to settle the case at no cost after the Supreme Court hearing. Laurion contends they couldn’t agree on the terms of the settlement, and said he not only deleted his initial postings after he was initially served, but had nothing to do with subsequent online statements about McKee.

    The lawsuit followed the hospitalization of Laurion’s father, Kenneth, for a hemorrhagic stroke at St. Luke’s Hospital in Duluth. Laurion, his mother and his wife were also in the room when McKee examined the father and made the statements that Laurion interpreted as rude. After his father was discharged, he wrote the reviews and sent the letters.

    On at least two sites, Laurion wrote that McKee said that “44 percent of hemorrhagic strokes die within 30 days. I guess this is the better option,” and that “It doesn’t matter that the patient’s gown did not cover his backside.”

    Laurion also wrote: “When I mentioned Dr. McKee’s name to a friend who is a nurse, she said, ‘Dr. McKee is a real tool!'”

    McKee sued after he learned of the postings from another patient. A St. Louis County judge dismissed the lawsuit, saying Laurion’s statements were either protected opinion, substantially true or too vague to convey a defamatory meaning. The Appeals Court reversed that ruling regarding six of Laurion’s statements, reasoning that they were factual assertions and not opinions, that they harmed McKee’s reputation and that they could be proven as false.

    The Supreme Court disagreed. Writing the opinion, Justice Alan Page noted that McKee acknowledged that the gist of some of the statements were true, even if they were misinterpreted. Page added that the “tool” statements also didn’t pass the test of defaming McKee’s character. He dismissed an argument by McKee’s attorney, Marshall Tanick, that the “tool” comment was fabricated by Laurion and that the nurse never existed. Whether it was fabricated or not was irrelevant, the court ruled. “Referring to someone as ‘a real tool’ falls into the category of pure opinion because the term ‘real tool’ cannot be reasonably interpreted as stating a fact and it cannot be proven true or false,” Page wrote.

    Tanick said the ruling could present a slippery slope.

    “This decision gives individuals a license to make derogatory and disparaging statements about doctors, professionals and really anyone for that matter on the Internet without much recourse,” he said.

    Jane Kirtley disagreed. The professor of media ethics and law at the University of Minnesota School of Journalism said the ruling stems from “an elementary principle of libel law. I understand the rhetoric, but this is not a blank check for people to make false factual statements,” she said. “Rather, it’s an endorsement that statements of opinion are protected under the First Amendment.”

    Laurion’s attorney, John D. Kelly, said the fact that Laurion’s speech was made online was inconsequential to the ruling, which treated it as a standard defamation case. “It’s almost as if things were said around the water cooler or perhaps posted in a letter to the editor,” he said. “I think the principles they worked with are applicable to statements made irrespective of the medium.”

    Full article:

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