NEGATIVE ONLINE REVIEWS: THINK BEFORE YOU SUE

By J. Malcolm DeVoy

The rise of online review sites like Yelp! and Avvo have made it easy for happy customers to recommend a business – but have also created a forum for the dissatisfied, or even complete strangers, to savage a business’ reputation. Reputational damage is very real, but can be difficult to prove. Nevada law recognizes this by removing the punitive damages cap on defamation claims.[1] When online reviews transcend criticism into outright falsehoods, any rational person may feel compelled to act. This is, however, a perilous path.

Business owners sensitive to consumer reviews have several options when confronted with false statements online. Unfortunately, there are few good ones. A disproportionate legal response to valid criticism can ensure that the complaint is widely distributed – a phenomenon known as the Streisand Effect.[2] Because of the increasing sophistication of courts and the law in grappling with these issues, it is most important to start knowing what not to do.

First: Make Sure The Statement Is False.

Many online criticisms are exactly that: Criticisms. They do not rise to the level of being false and harmful. In Nevada, defamation requires that a statement 1) be made to a third party, 2) with fault arising to at least negligence, 2) be false and made without privilege, 4) be harmful, and 5) cause damage. These elements apply to both slander (spoken defamation) and libel (written defamation).

Saying that a restaurant’s food is “disgusting” or “gross” is a matter of subjective opinion, and not a false statement of fact. Questions of mixed opinion and fact, though, are more difficult. Is a statement that a doctor whose patient died a “murderer” actionable defamation? Unfortunately, the answer is that it depends.

This question becomes even harder for businesses and business-owners. Since the 1960’s, public figures have had to prove “actual malice” to prevail on a claim for defamation, requiring that a plaintiff prove that the false statements were made either 1) with knowledge that they were false, or 2) with reckless disregard for their truth. Business owners and professionals may be “limited purpose” public figures also subject to this standard.[3] A doctor likely would have to satisfy the actual malice test for statements made about him in his capacity as a doctor (as opposed to statements made about him as a neighbor).

Second: Do Not Sue The Website.

It’s tempting to target a website when redressing a false review. After all, the site hosts it and can take it down anytime it likes. Review sites, however, are familiar with legal threats and quickly dispatch them.

Federal law grants broad immunity to websites that provide user-submitted content.[4] While this law has allowed popular services like Facebook to thrive, it has also created a shield for services to profit from others’ false statements as well. While this broad grant of immunity is frustrating, attacks upon it generally end in failure. In order to actually fix the problem of a false review, though, one’s efforts are better spent elsewhere.

Third: Suing the Individual Poster.

With the website out of the way, there is the question of suing the individual who wrote the false statements. For suing an individual whose identity is known, one can proceed as they would in a normal lawsuit. Where the defendant’s identity is not known, though, he or she must be sued as John or Jane Doe.

Suing a Doe has become a common phenomenon in Nevada’s courts. To do so, name the Doe as a defendant and move the Court for leave to take early discovery.[5] This will require explaining to the Court why John or Jane Doe’s identity cannot be ascertained without early discovery, describing the investigation thus far conducted, and identifying the proposed discovery to be used to ascertain his or her identity – such as subpoenas to the website hosting the false statements, or another service provider with information about the author. Using these early discovery tools, the Doe’s identity may be revealed, and an amended complaint filed with complete caption.

Fourth: If You Sue, Prepare for War.

Lawsuits are expensive, a significant intrusion onto business and personal time, and full of uncertainty. Since late 2013, filing a lawsuit based on expressive conduct in Nevada requires a new dimension of planning. Like other states including California, Washington, and Oregon, Nevada has adopted robust laws protecting defendants from lawsuits based on their lawful public speech, unaffectionately dubbed “SLAPP” suits, an acronym for Strategic Litigation Against Public Participation. Laws designed to thwart these actions are called “anti-SLAPP” statutes.

Not every defamation lawsuit is a SLAPP suit, but many actions based on false online reviews may fall under the purview of an anti-SLAPP statute.[6] An anti-SLAPP motion halts all discovery in the case and must be heard within seven judicial days after being served on the plaintiff. Nevada requires anti-SLAPP motions to be evaluated on a basis similar to motions for summary judgment, potentially forcing the claimant to produce evidence supporting its claims before any discovery occurs. Even if a plaintiff defeats the motion, the defendant is still entitled to an immediate appeal of its denial, during which all discovery remains stayed.

If a defendant succeeds in bringing an anti-SLAPP motion, there are significant consequences. The court must award the successful movant his or her reasonable costs and attorneys’ fees, and potentially up to an additional $10,000. A successful movant also acquires a new cause of action against the defeated plaintiff, entitling the defendant to punitive damages and an award of attorneys’ fees and costs in the new lawsuit. In close cases where there is a question of whether a review is based on fact or opinion, the potential costs may outweigh the benefits of litigation.

However, Nevada’s anti-SLAPP law may be changing. At the time of this article, proposed legislation before the Nevada Legislature would change the scope, timing, and consequences for filing an anti-SLAPP motion. If this legislation passes, the proposed changes to Nevada’s anti-SLAPP law would not take effect until on or after October 1, 2015.

Fifth, and Finally: Consider Other Alternatives.

As the legal landscape evolves to disfavor defamation lawsuits based on consumer reviews, other alternatives should be considered before resorting to litigation. When a customer truthfully speaks his or her mind, it is best to try to learn as much as possible from the experience. Even reach out to the customer: Not to pursue litigation, but to try to make things right and have him or her update their statements afterward.

Some services, such as Yelp!, allow businesses to highlight positive reviews if they register with the website. Many websites will allow business owners to post rebuttals. However, licensed professionals bound by confidentiality should avoid this approach.

Search engine optimization companies can be used to increase the likelihood of good news about a business being highlighted in the results of an Internet search, rather than criticism. A more robust website can also increase the likelihood Internet searchers finding a business, rather than its detractors. Traditional public relations also plays a role, as favorable coverage in a publication like the Las Vegas Review-Journal will carry more weight than anonymous criticism.

The right answer ultimately depends on the business and its unique circumstances. As with any other dispute, a rush to litigation is not advised. Using other methods may yield better results in fixing the problem of negative reviews, without memorializing them on the public record.

1. Malcolm (“Jay”) DeVoy is the owner of DeVoy Law P.C. and serves as of counsel to The Firm P.C. Jay focuses on representing individuals and businesses in their commercial disputes, and advising them about the changing rules of federal agencies such as the FDA and FTC.

[1] NRS 42.005(2)(e).

[2] The Streisand Effect is named after Barbara Streisand. Streisand contributed to this term’s creation when she threatened legal action against a website that contained public images of her California mansion. Prior to Streisand’s threats, few people knew of the website’s existence. After taking an aggressive legal position, knowledge of the site and her mansion mushroomed – drawing more attention to something she sought to bury.

[3] Pegasus v. Reno Newspapers, Inc., 118 Nev. 706, 721, 57 P.3d 82, 92 (2002).

[4] 47 U.S.C. § 230.

[5] See Michael P. Lowry, Using Discovery to Identify “Anonymous” Online Tortfeasors, Compelling Discovery (Oct. 2, 2014), http://www.compellingdiscovery.com/?p=2962 (last accessed May 1, 2015).

[6] NRS 41.635-670.