Following up on her previous blog posts, Hospitality, Travel and Tourism practice team member, Judy Endejan, shares the latest legal developments in the battle over negative on-line reviews. Thank you, Judy! – Greg
The latest skirmish between businesses and negative on-line reviewers resulted in a win for TripAdvisor. On December 30, 2014 an Oregon trial court ruled that Oregon’s Shield Law protects TripAdvisor from having to disclose the true identity of a poster on its on-line reviewing service. The Ashley Inn, from Lincoln City, sued TripAdvisor reviewer, “12Kelly,” who posted several scathing reviews about the Inn. The Ashley Inn sought to compel the identity of “12Kelly.” A Multnomah County circuit judge refused to do so by applying Oregon’s Media Shield Law, ORS 44.520. That statute protects a reporter from having to disclose the source for information used to prepare a news report. The court found that the Shield Law protected TripAdvisor because it is a “medium of communication.” Hence, TripAdvisor did not have to disclose the identity of its “source” - “12Kelly.”
This case is significant because this is one of the first rulings to apply a state media shield law to preclude the identification of an anonymous on-line reviewer. Traditionally, a shield law protects reporters from compelled disclosure of confidential information or sources in state court. (There is no federal shield law yet.) The policy behind a shield law is to further First Amendment goals by protecting the news gathering process, thereby enhancing the free flow of information. This process can depend upon information from anonymous sources. Without protection against disclosure, such sources may not come forward with information of great public concern.
As a result of the trial court’s ruling, the Ashley Inn cannot proceed with its defamation case because it cannot discover the party responsible for the alleged defamation in the bad review. The Inn’s owners contend that 12Kelly’s negative statements were false, because 12Kelly never registered as a hotel guest, based upon what could be learned about him from the on-line reviews.
The Oregon ruling contrasts with one from Virginia currently pending at the Virginia Supreme Court. That case Yelp!, Inc., v. Hadeed Carpet Cleaning, Inc., is being closely watched because the issue in that case is whether a business owner can unmask an anonymous blogger that posted specific critical reviews of his carpet cleaning company. However, the Virginia ruling appears based on a Virginia statute, and not upon a shield law. That Virginia statute requires only that a business prove that a negative review is, or “may be defamatory,” or that it has a legitimate good-faith basis for believing that the review is defamatory in order to learn the identity of the reviewer. Hadeed Carpet Cleaning presented evidence that could prove that the seven negative reviewers were not actual customers of the carpet cleaners, which the court found could mean that the reviews could be defamatory.
We will report the Virginia Supreme Court ruling once it is handed down, but the Virginia case may be an anomaly because courts seem more inclined to do what it takes to preserve the freedom of on-line reviewers to post comments, as in the recent Oregon decision.
The hospitality industry regularly faces tremendous challenges, ranging from unexpected tornadoes to salmonella lurking in organic eggs requested by guests. However, negative reviews on TripAdvisor.com or similar sites pose particularly perplexing challenges. Should the business respond or ignore them? Our newest post from Judy Endejan, discusses the latest legal developments regarding negative on-line reviews. Thank you Judy! – Greg
Further, it’s very hard to strip a consumer of what many view as a fundamental First Amendment right to criticize. Recently consumer groups have sought legislation that would prohibit businesses from stifling consumer reviews unless a consumer has expressly waived his or her right to give an opinion. Such legislation is pending in California.
So what is a business supposed to do about a false, negative review? That depends on whether it can identify the negative reviewer and whether the review contains legally actionable statements. The First Amendment protects clear statements of opinion as long as the statement contains sufficient facts for a reader to know the basis for the opinion. When an “opinion” implies the existence of undisclosed defamatory facts, it is actionable. For instance, a review that contains hyperbolic, figurative language, such as “the place was a trainwreck” is generally viewed to be opinion and not defamatory if it explains why the reviewer came to that conclusion. In contrast, reviews that contain provable false statements of fact may be actionable. An example of this might be a review that states “the hotel lied about its cancellation policy,” when the cancellation policy is clearly disclosed in multiple places such as on its web-site, in confirmation letters and posted at the front desk. In one recent case, Neumann v. Liles, the Oregon Court of Appeals allowed a defamation action to go forward against a wedding guest who posted a negative review on google.com about the wedding venue. The Court found that the review contained factual statements that were wrong. The Oregon Court found that the fact a plaintiff -business is public does not make the plaintiff a public figure, which makes it easier to prove defamation. Otherwise if the plaintiff is a public figure the plaintiff must present evidence of actual malice, which means knowledge of falsity or reckless disregard of whether a statement is false.
This month a Lincoln City hotel owner took advantage of the Neumann ruling by suing an anonymous tripadvisor.com user that posted a negative review that stated, among other things, “the owner smokes weed” and the front desk attendant “had phone sex with someone.” The Lincoln City hotel owner may have a hard time discovering the identity of the anonymous reviewer, however. The First Amendment right to free speech includes the right to remain anonymous. Website owners are extremely reluctant to cooperate in disclosing the identity of reviewers, if subpoenaed by a plaintiff in a defamation suit. Any subpoena issued by a plaintiff’s attorney will likely be met with a motion to quash. The right to remain anonymous is not absolute, however, and a business can succeed against a motion to quash, if it meets certain criteria that will vary from state to state. For instance in Arizona, the plaintiff must show that (1) the anonymous speaker has been given adequate notice and a reasonable opportunity to respond to the subpoena; (2) the plaintiff’s cause of action could survive a motion for summary judgment for defamation on the elements of the claim, independent of the identity of the anonymous speaker; and (3) a balance of the parties’ competing interests favors disclosure, i.e. issuance of the subpoena to obtain the identity of the speaker. Other jurisdictions, such as Washington D.C., require a plaintiff to prove that there is direct financial injury caused to the business by the alleged defamation.
While a business may be able to sue the reviewer it cannot sue Tripadvisor.com, and other sites such as Yelp. Congress enacted Section 230 of the Communications Decency Act that shields these from liability, as long as they are simply a platform for messages created by others.
Legal developments continue to swirl over the ying and yang of negative on-line reviews. On the one hand, many businesses have a legitimate concern about stopping unfounded false, negative reviews that will harm their business. On the other hand, consumers now view it as a God-given right to express their opinions about businesses in the many on-line forms that exist today. So stay tuned for further developments.
Mike Brunet is an associate working closely with Diana Shukis in our Employment Law Practice Group. Both Mike and Diana do a lot of work with our hospitality clients in the areas of personnel and management issues - from creating and implementing comprehensive policies and procedures to providing key, timely advice during volatile workplace situations. Today, Mike tackles the hot topic of employee social networking, from an employer’s perspective:
Greg Duff founded and chairs Foster Garvey’s national Hospitality, Travel & Tourism group. His practice largely focuses on operations-oriented matters faced by hospitality industry members, including sales and marketing, distribution and e-commerce, procurement and technology. Greg also serves as counsel and legal advisor to many of the hospitality industry’s associations and trade groups, including AH&LA, HFTP and HSMAI.