Jane Perez, a Virginia resident, took to the internet to voice her dissatisfaction with Christopher Dietz’s work on her newly purchased home. Dietz, a contractor, has filed a $750,000 defamation lawsuit in response to the bad Yelp review and similar reviews on Angie’s List in which Perez accused Dietz of damaging her home and stealing jewelry. A Fairfax County judge ruled in a preliminary injunction requiring certain accusations to be deleted from the online reviews, but the defamation issues have yet to be decided.
With consumers’ increased reliance on online review websites like Yelp and Angie’s List, professionals rely on their overall rating to earn new business. A 2011 Harvard Business School Study on Seattle Restaurants found that an increase of one-star for a restaurants overall rating on Yelp results in a 5 to 9 percent jump in revenue.
This lawsuit is just one of an increasing amount of legal actions over online consumer reviews. While defenders of the First Amendment see these lawsuits as infringing on freedom of speech, business owners believe that they must take action when a false review seriously damages their reputation. The Communications Decency Act of 1996 protects online review websites from lawsuits based on content posted by its users, but individual reviewers can be sued for defamation. Defamation laws vary by state, but Virginia law defines defamation as a statement that implies a factual statement about a person or business that causes harm to the subject’s reputation.
According to a Washington Post article, lawsuits based on negative online reviews can produce gigantic awards. A 2012 lawsuit filed by a California technology company ended in a $1.6 million judgment against a blogger who accused the company of stealing money from business associated. Alternatively, unsuccessful lawsuits can cost business owners as well. In 2011, a California judge ordered a dentist to pay the legal fees of a patient that he sued for defamation over a negative Yelp review. In this case, Dietz’s lawsuit has already spawned several comments by users claiming that they would be hesitant to hire a contractor who sued an unhappy client, and other dissatisfied clients have since posted negative reviews on his Yelp page, none of which can be removed without Dietz filing additional lawsuits.