Hadeed Carpet’s Subpeona Against Yelp Gets Swept Under the Rug

The Virginia Supreme Court made it harder for businesses stung by anonymous social media postings to fight back and get information identifying the people who post online comments.  In Yelp v. Hadeed Carpet Cleaning, the court threw out a Virginia Subpoena and Contempt Order against Yelp after the social media giant refused to turn over documents identifying people who anonymously posted negative social media comments about Hadeed.

In a decision that sidestepped free speech issues presented by going after negative social media commentary, the court concluded that in order to force Yelp to fork over the identifying documents that were stored in San Francisco, Hadeed had to go to a San Francisco court and get a subpoena there to get the documents.  This decision yields a convoluted result, since such a business trying to unmask an anonymous social media purveyor of defamatory online statements needs to go ‘coast to coast’ in order to get a Virginia court to obtain documents in California.  This is not an efficient use of company resources already suffering from false online commentary.  Also, as the dissenting justices pointed out, this result is clearly outdated since companies like Yelp probably have documents electronically available all over the country, and treating these materials like they are sitting in a 1950’s file cabinet seems absurd.

Businesses and executives need to be aware of this decision, and the fact that they can still go after anonymous online social media postings that are false and defamatory.  They just need to go through an extra hoop to get a subpoena that is issued from the jurisdiction where such information is located to get the information identifying who posted false online information.  Companies can still get their day in court to fight false online social media postings, but will have to do so more methodically as they fight back to maintain their online reputations.

Seth Berenzweig is managing and founding partner of Berenzweig Leonard, LLP, and often appears in the national media to discuss breaking business news.

Companies Can Now Fight Back Against Anonymous Online Criticism

It is every company’s worst nightmare: An anonymous poster goes online and makes negative and disparaging statements about the company.  In the social media age we are in, this unfortunate scenario has played out countless times on such sites as Yelp, Rip-Off Report, and other online review sites.  Companies faced with this situation have largely felt powerless to counteract anonymous posters or even find out who the posters are.  But a recent decision by the Virginia Court of Appeals will now give companies some much needed leverage to fight back.

Yelp was forced this week by the Virginia Court of Appeals to “unmask” anonymous posters who posted negative, and possibly false, reviews about a local Virginia carpet cleaning company, Hadeed Carpet Cleaning. Hadeed believed that seven negative Yelp reviews of its services were false, and so it filed a defamation lawsuit against the anonymous posters, naming them as “John Does.” In order to unmask the anonymous posters, Hadeed then sent a subpoena for documents to Yelp, which Yelp objected to on First Amendment grounds.

The Virginia Court of Appeals ruled that Yelp had to comply with the subpoena and provide information about the identities of the online posters.  The Court balanced the First Amendment rights of the anonymous posters versus the rights of companies to protect their reputations, and stated that false statements are not protected by the First Amendment. Yelp argued that Hadeed Carpet Cleaning had to prove its defamation case before Yelp could be forced to unmask its posters – even though Virginia law does not require companies to meet that burden. The Court clarified that Virginia’s unmasking procedure only requires a company to have a legitimate good faith basis to contend that it has been a victim of defamation. Yelp now has to produce the records and disclose the people who posted the negative reviews.

This is a very significant decision in the social media arena, and provides some much-needed leverage for businesses seeking to protect their online reputations against false and often faceless posters. Businesses often need to protect themselves against online attacks by posters who post false reviews, and this recent decision clarifies the legal avenues available to companies in Virginia and potentially elsewhere to protect against malicious posters seeking to damage business reputations.

Seth Berenzweig is a managing partner at the DC regional business law firm, Berenzweig Leonard, LLP. Seth can be reached at sberenzweig@berenzweiglaw.com. Katie Lipp, an attorney with the firm, co-authored this post. Katie can be reached at klipp@berenzweiglaw.com.