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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.

Please contact me or Judy by email if you have any questions.

The hospitality industry regularly faces tremendous challenges, ranging from unexpected tornadoes to salmonella lurking in organic eggs requested by guests.  However, negative reviews on 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 

Recently, some businesses have battled negative reviews aggressively by using contracts.  One web retailer,, slapped a $3,500 fee on a customer for violating an anti-disparagement provision in its terms of use on its web-site and reported the customer as delinquent to credit agencies, harming their credit.  In another situation, a New York dentist required her patients to sign an agreement waiving any right to comment publicly about her services and to assign to her the copyright in any- after- the fact reviews.  While these examples represent creative, albeit desperate, attempts to stymie negative reviews, such tactics may cause more harm than the negative reviews.  For instance, the consumer who criticized has sued the company for harming her credit and trying to collect the $3,500 fee.

If a business sues a consumer for a negative review based on breach of its website’s terms of use, a court might void the language if it is unconscionable.  Standard consumer contracts printed in small type, that are not separately negotiated, generally will not be enforced because there is unequal bargaining power between the parties, which makes the contract unconscionable. However, this does not mean that every clause that waives the right to provide negative reviews is automatically unenforceable.  If these provisions are highlighted, specifically negotiated and supported by some unique consideration (such as a coupon for a free meal) a court might enforce them.  But how many businesses want to sue a customer?

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 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 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, 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.

Please contact me or Judy by email if you have any questions.

A recent Virginia court of appeals’ decision, including allegedly false reviews on Yelp!, have drawn a lot of attention to false reviews and hoteliers and restaurateur’s options for responding. Our newest post from recent Garvey Schubert Barer addition, Judy Endejan, looks at the Virginia decision and offers vendors some practical advice on managing their social media reputations. We are thrilled to welcome Judy and the extensive communications and First Amendment expertise she brings to GSB. Welcome Judy! - Greg 

A common modern headache most hoteliers and restaurateurs face is a negative review that torpedoes the room, the food, or the room service to be posted by an anonymous blogger on Yelp!, or any one of the other well established user review websites or blogs.  How should you react?

First, do not overreact.  If the negative review is far outweighed by positive reviews, most readers will give little weight to an outlier, concluding that the poster either had a fight with his or her partner or a cosmic headache.

Second, analyze the review.  If the review appears to contain false information that needs to be corrected, you have a different path than if the review, viewed overall, appears to be nothing but a statement of opinion.  In the latter case, frankly, there is little that you can do because the First Amendment protects a statement of a personal opinion about a business that they patronized.  The review must tell the reader, however, the factual assumptions upon which the opinion is based.  The First Amendment does not protect a statement of opinion that is based upon an undisclosed or false statement of facts.

If the anonymous review truly contains provably false statements, then consider carefully these options.  First, contact the website and ask to remove the false statements.  Yelp!’s terms of service, for example, allow the removal of a review for any reason or no reason and will also remove reviews that violate their content guidelines.  These guidelines require the reviewer to have first-hand consumer experience (i.e., to actually have been a customer).  Furthermore, the content guidelines require that the review be factually accurate or correct.  While these websites have no enforceable contractual relationship with your business, it should be held to its public pronouncements. Yelp! represents on its website that it will not tolerate false information or information from reviewers who were not first-hand customers.  Its terms of use advise reviewers that it may disclose information to third parties “if we have a good faith belief that such a disclosure is reasonably necessary to…enforce or apply our terms and privacy policy, or comply with legal process such as a subpoena.”  In short, your best first action would be to make an immediate effort to get the website to remove the false review to minimize damage.  Try to contact a live person (which can be a challenge) armed with facts to refute the false review that you are trying to take down. This approach will not necessarily compensate you for any lost business you might suffer as a result of a negative review or give you much emotional satisfaction, but it is preferable to taking formal legal action against the negative reviewer for defamation.

Defamation litigation is problematic from many standpoints.  First, defamation litigation might cause a “Streisand Effect” – meaning that your lawsuit against an anonymous blogger might generate far more publicity than any publicity possible from the negative review.  This could be bad for business.

Comment BoxesSecond, you will face several hurdles in a defamation action.  The first hurdle will be to discover the identity of the anonymous negative reviewer.  Yelp! defends against disclosing the identity of its users quite vociferously.  Recently it lost a case at the Court of Appeals of Virginia (Yelp!, Inc. v. Hadid Carpet Cleaning, Inc., Record No. 0116-13-4).  There, the Court applied a special Virginia procedural statute targeted at unmasking anonymous bloggers and upheld a contempt order against Yelp!, when Yelp! refused to identify seven anonymous bloggers that posted specific critical reviews of the carpet cleaning company.  The Virginia statute has a lower standard for protecting anonymous speech than those adopted in other leading cases regarding unmasking internet bloggers.  The Virginia Court did not follow these leading cases, Dendrite International, Inc. v. Doe #3, 775 A 2d 756 (N.J. Super Court App. Div. 2001) or Doe v. Cahill, 884 A. 2d 451 (Del. 2005), which impose a fairly strict standard for a defamation plaintiff to pass.  Under Dendrite and Doe, the plaintiff has to provide evidence that substantiates that the speech was tortious (i.e., defamatory) or otherwise illegal to overcome First Amendment protection of anonymous speech, which requires a compelling state interest.  The Virginia Court applied the Virginia statute, which has a lower burden, requiring only that you prove, among other things, that the review is or “may be” defamatory, or that you have a legitimate, good faith basis for “believing” that the review is defamatory.  In the Virginia case, the plaintiffs presented evidence that could prove the seven reviewers were not actual customers of the carpet cleaner.  The Court reasoned that if the reviewers weren't customers, then whatever they said must have been false, hence defamatory.

While the Virginia case may indicate some easing of the burden for getting redress against a negative Yelp! review, that case is based on a specific state statute and should not be viewed as having universal application in other parts of the country.

Even if your business could succeed in unmasking the identity of a negative reviewer, you still face the considerable burden of proving that the speech was libelous, which is subject to other constitutional burdens.  In some states, like Washington and California, anti-SLAPP statutes allow a defendant to test the strength of a plaintiff’s case for defamation by requiring the plaintiff to prove why it will win at an early stage of the litigation.  If the plaintiff can’t do that,the plaintiff has to pay attorneys’ fees and a possible penalty to the defendant.

In sum, before considering a litigation option, your business will need to think long and hard before undertaking the burdens associated with it.  In the end, the best way to deal with a negative review is to bury it among positive reviews.

Please contact me or Judy by email if you have any questions

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Greg Duff
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.

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