How one small San Francisco case may cause significant change for the Internet and its users

2016_07_27-yelp-law-suit_homepage-3-22527971222Ever rely on a negative review on Yelp? Ever write a negative review on Yelp?  Well, one small dispute in San Francisco has set precedent in place that such a review can be found defamatory and ordered removed by not only the reviewer but Yelp itself – even when Yelp was not a party to the action. The decision, which was recently upheld up by the California Court of Appeal (Hassell v. Bird (2016) 247 Cal.App.4th 1336), is currently being reviewed by the California Supreme Court. An opinion is expected next year; however, the decision is a departure from the common understanding that user generated content is not only unequivocally protected by the First Amendment but that the online publisher is immune from any liability for such content under Section 230 of the Communications Decency Act.

This decision is intriguing on its face because apparently a business has recourse and potential legal support to seek certain comments be removed from online sites like Yelp (or Google, or Facebook, or Trip Advisor etc.) but what is also of import to the likely reader of this blog are the underlying facts, which involved review of an attorney’s handling of a personal injury case. Yes, you can post a review of your lawyer on Yelp.

San Francisco attorney Dawn Hassell’s firm represented Ava Bird for 25 days in a simple personal injury case in 2012. Hassell withdrew as counsel because her firm had difficulty communicating with Bird and Bird expressed dissatisfaction with Hassell’s firm. Hassell produced evidence of dozens of direct communications with Bird, at least one in-person meeting, and efforts made to resolve Bird’s claim with the insurance company involved. At the time Hassell withdrew, Bird had 21 months to file her claim before the statute of limitations expired. A few months later, on January 28, 2013, Bird posted a “one-star” (the lowest rating) review on Yelp.com about her experience with Hassell. Thereafter, Hassell sent Bird an e-mail (after telephone calls were apparently not returned) requesting she remove “the factual inaccuracies and defamatory remarks” from Bird’s review to which Bird refused.

Hassell then filed suit in February 2013 allegedly after seeking Yelp’s assistance and after she was advised by counsel for Yelp that the only recourse was legal action against the actual reviewer, Bird. Of course that recollection is disputed by Yelp. After filing suit, Bird posted yet another review (to which Hassell responded to on Yelp). It is also alleged by Hassell that Bird then posted at least one other review under another pseudonym.

Hassell prevailed because Bird never showed up in any of the proceedings and thus, a default was entered against her. At the default prove-up hearing Hassell was sworn and testified. Bird again did not appear. The Court found the reviews defamatory and awarded approximately $555,000 in damages and costs as well as an injunction ordering Bird to remove her posts about Hassell and her firm from Yelp. Now here is where the twist comes in: Hassell requested –  in light of Bird’s history of “flaunting” the California court system  – and the Court also ordered non-party Yelp to remove all Bird’s reviews including those Bird was thought to have posted under another pseudonym. Yelp was served with the judgment but determined that the judgment was “rife with deficiencies” and saw “no reason at this time to remove the reviews at issue.” Yelp then sought to set aside and vacate the judgment, which the Court denied finding that Yelp highlighted the defamatory reviews; the motion was not limited to Yelp’s own interests; and Yelp refused to acknowledge by a judicial finding that Bird’s reviews were defamatory and thus in violation of its own terms of service and therefore, “Yelp is aiding and abetting the ongoing violation of the injunction.” Yelp appealed.

There are a three central issues at play here: first, due process considerations as Yelp was a non-party to this action yet was ordered to remove posts from its website; second, immunity for online providers as Yelp claims it is legally immune from liability from what its users post on its sites under Section 230 of the Communications Decency Act; and third, First Amendment rights as Yelp claims Bird’s speech is being suppressed when Hassell failed to prove it was defamatory (because the finding was not made by a jury).

The appeals court affirmed the trial court’s order denying Yelp’s motion to vacate the judgment. In sum, the Court of Appeal found that: Yelp was not aggrieved by the judgment; Yelp had no constitutional right to notice and a hearing on the trial court’s order (to remove the reviews); and the Communications Decency Act did not bar the trial court’s order.

As to the First Amendment claims, the Court of Appeal found those statements that were found defamatory are not afforded the protection of the First Amendment but to the extent that the order included subsequent posts that Bird or anyone else may post, the order is a prior restraint on speech. The matter was remanded to the trial court to modify its order accordingly on the issue. Yelp raised the argument that the speech found defamatory was not a finding by a jury but rather, by the judge so it was not properly decided to which the Court found no legal support for that argument.

This decision has caught the eye of the ACLU and certain non-profit think tanks who are champions for free speech and the internet economy in addition to a significant number of members of the Internet community (Facebook, Twitter). This decision is a big threat to Section 230 as it not only opens up liability to online publishers but threatens to limit speech. Not to mention this could place the onus on these publishers to edit user content to “one side of the debate.” Hearing both sides of a debate is a tenet both appreciated and disliked about online user content but nevertheless respected under the theory that all opinions, negative or positive, should be heard. So basically an action won essentially by default that resulted in a judgment against a non-party online publisher may turn online speech for everyone – user and publisher – on its head. For many of us that use Yelp regularly, there is in inherent value in both positive and negative reviews but the latter reviews may soon be silenced for fear of liability.

The reviews remain on Yelp to this day so if the opinion is not overturned, Yelp likely faces contempt proceedings and Hassell and her firm potentially remain harmed by the defamatory speech albeit Hassell does have a “five star” rating on Yelp. Regardless, this little dispute may change the meaningfulness of such reviews. Stay tuned.