Online Reviewers Beware: You Can Get Sued

Everyone's a critic these days, but defamation laws still exist in the Internet age

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The Yelp Inc. logo is displayed in the window of a restaurant in New York, U.S. on March 1, 2012.

Jane Perez, a retired captain in the military from Fairfax County, VA, was not happy with her home contractor, so she wrote reviews on Yelp and Angie’s List explaining why. She said he had done a poor job on her renovations and billed her for work he did not perform — and that he may have stolen her jewelry. She warned readers: “Bottom line: do not put yourself through this nightmare of a contractor.”

The contractor, Christopher Dietz, filed a $750,000 defamation suit and got a judge to order Perez to rewrite the reviews. The Virginia Supreme Court recently reversed that decision, saying that reviews should not be censored — and that if they were defamatory, Dietz should focus on getting money damages.

The ruling is being hailed as an important victory for freedom of speech on the Internet, which it is. But it is also a reminder of the risks that come with being an online critic. Sites like Yelp! and Amazon give ordinary people the power to write reviews that have a major impact on other people’s reputations and livelihoods. But it also means that they can be held legally responsible if what they write is defamatory.

(MORE: Is Yelp Really for Morons?)

Before the Internet, critique of any kind was mainly the perview of journalists. Editors, and sometimes lawyers, reviewed them for fairness and accuracy. Non-journalists who wanted to complain about businesses or other people could express their views by word of mouth, but it was difficult for them to reach a mass audience or to do much damage. Now, of course, everyone is a critic—entire businesses have been built upon the crowdsourced opinion of the masses. There is money to be made—and lost, as bad reviews can have a major impact on a company’s bottom line.

Dietz claims that Perez’s reviews cost him a substantial amount of lost business, along with “insult, mental suffering, being placed in fear” and “anxiety,” and harm to his reputation. In his suit, he charged that Perez’s reviews were false. He insists he did the work satisfactorily and charged her only for work he did. He denies that he or his workers took any jewelry. In fact, Dietz says Perez wanted him to do additional work for free — and then refused to pay him.

(MORE: The Yelp Conspiracy: How a Group of Businesses Conspired to Get Better Yelp Ratings)

Dietz scored a big victory in the lower court when he persuaded a judge to order Perez to rewrite her reviews, but civil liberties groups were outraged. The ACLU argued that the order violated Perez’s first amendment rights by telling her that she could not make certain statements even before a court had determined that they were false or defamatory. In late December, the Virginia Supreme Court agreed. If Perez’s reviews prove to be defamatory—if they are false and they injured Dietz’s reputation— Dietz can collect monetary damages. But he has no right to get the reviews taken down while the courts try to figure out who is right.

Under federal law — 47 U.S.C. § 230, to be specific — websites like Yelp and Angie’s List are shielded from being sued for defamation, but the writers — people like Perez — are legally responsible for what they write and lawsuits can be filed against them. That may not be what a lot of people are thinking when they go on Angie’s List or Amazon to air grievances. In fact, Perez told the Washington Post that when she posted her reviews it never occurred to her that she might end up in court or on the hook for thousands of dollars in legal fees — not to mention the monetary damages. Dietz is suing for $750,000, and awards can go far higher than that. In 2006, a jury awarded a Florida woman $11.3 million in damages against a woman who made defamatory comments on an Internet message board.

The Virginia Supreme Court’s ruling is an important defense of people’s right to go online and express their views. But it is also a reminder that anyone who crosses the line may have to pay up — big time.

MORE: 9 Reasons Why You Shouldn’t Trust Online Reviews