On the Internet, everyone is a critic. Computers have turned every restaurant patron into Gael Greene and every moviegoer into the late Roger Ebert. But what happens when these anonymous critiques go too far and potentially defame the target? Does the ease by which one can voice his or her opinion digitally, and the fact that these self-authored "reviews" appear solely online, shape the way the public — and, more importantly, the courts — evaluate such statements?

Everybody Talks

Now, more than ever, a business’ online presence matters.

In a 2008 academic study titled "Do Online Reviews Matter? – An Empirical Investigation of Panel Data," by Wenjing Duan, Bin Gu and Andrew Whinston, empirical results demonstrated that the number of online user reviews was a solid indicator of the strength of both the underlying word-of-mouth effect and consumer awareness. Such reviews also have a significant impact on offline purchase behaviors.

Likewise, according to a March ReadWrite article titled "How Online Comments Are Becoming a Big Business," vendors like Livefyre and Disqus that offer online commenting services to websites are commanding tens of millions of dollars in funding from eager investors.

Take Yelp, for example. Founded in 2004 to help people find local businesses, Yelp empowers anyone with a computer to reach its estimated 100 million monthly visitors (not to mention its 9.4 million mobile users) with self-authored "reviews" of various businesses in their community. While such reviews can be a boon for business, they can also have a destructive influence: any perceived slight can result in a negative review that damages a business’ reputation, affecting its bottom line. Indeed, the anonymity afforded by such websites often lends itself to the use of caustic rhetoric unique to the medium.

In response, businesses are exploring ways to protect their online reputations.

Having little recourse to remove such posts on their own, some businesses try to bury or rebut negative comments with positive ones. While other businesses have instead turned to the judicial system — filing defamation actions against review websites and/or the individual reviewers themselves to have the comments removed.

As with this latter approach, a trend appears to be emerging that posts on review sites like Yelp — even those that contain seemingly factual assertions — can nevertheless constitute non-actionable opinion. If such rulings continue, a heightened standard for liability may emerge for such online, user-generated reviews.

The Line Between Fact and Opinion

The tort of defamation generally applies to statements presented as assertions of fact, not opinion. As one California court explained in Ibarra v. Carpinello, 2011 Cal. App. Unpub. LEXIS 2031 (Cal. App. 2d March 18, 2011), a statement is "actionable only if it could reasonably be understood as declaring or implying actual facts capable of being proved true or false." This threshold issue is usually resolved as a matter of law. Yet, the critical distinction between fact and opinion remains an area subject to varying interpretations.

One Scathing Review

Distinguishing between assertions of fact and mere opinion online has been particularly problematic for business owners. The recent case of Brompton Building v. Yelp!, 2013 Ill. App. Unpub. LEXIS 145 (Ill. App. Ct. Jan. 31, 2013), is illustrative of this point.

Brompton started out like many other online defamation cases, with a plaintiff seeking to compel a website owner to identify an otherwise anonymous online reviewer via subpoena. But before issuing such a subpoena (often referred as an "unmasking subpoena"), a court must initially balance the unknown reviewer’s First Amendment right to engage in anonymous speech with the opposing party’s right to prosecute tortious speech. Inevitably, such an analysis delves into a traditional fact-vs.-opinion analysis.

In Brompton, the landlord sought to identify a tenant and Yelp user identified only as "Diana Z." In her admittedly less-than-flattering review, Diana Z. sarcastically stated her interactions with her landlord’s management company made "contracting herpes [not seem so] horrible." But the review also made more serious allegations regarding the fact that the landlord purportedly charged tenants fraudulent late fees for rent paid on time, according to the opinion.

In support of its subpoena, the landlord emphasized it was filing a defamation action in response to the fraudulent conduct allegation, and was not trying to chill tenants from offering opinions.

The court was not swayed by the landlord’s argument. Rather, it found that despite the reviewer’s seemingly specific factual allegations about improper collections, the entire post "when read as a whole" and "in context" constituted mere non-actionable opinion.

‘The Dirtiest Hotel in America’

Other courts have seized upon "context" in rejecting online defamation claims. For example, in Seaton v. TripAdvisor, 2012 U.S. Dist. LEXIS 118584 (E.D. Tenn. Aug. 12, 2012), a hotel owner sued travel review website TripAdvisor (a reviewer of hotels, flights and vacation rentals) for posting a list rating his hotel as the "dirtiest hotel in America." The data supporting this list came solely from its user reviews. Nevertheless, the hotel owner posited that the list was defamatory because it "is put forth with an actual numerical ranking, with comments suggesting that the rankings are actual, verifiable and factual."

The U.S. District Court for the Eastern District of Tennessee disagreed, holding that a reasonable person would understand that the list was nothing more than the "opinions of TripAdvisor’s millions of online users." The court arrived at this conclusion despite the suggestion that some of the user reviews came much closer to being considered fact than opinion. For example, one user noted that "there was dirt at least a half-inch thick in the bathtub." In defending its conclusion, the TripAdvisor court went on to observe such user reviews are "omnipresent" in today’s commercial sphere, stating "everything is ranked, graded, ordered and critiqued."

A Tough Row to Hoe?

In light of the ubiquity of anonymous user-generated reviews, some courts appear to be adopting a presumption that statements on sites such as Yelp may be inherently unreliable assertions of opinion — even when the reviews themselves purport to state facts.

This is likely a response to Yelp’s current business model, by which anyone can post a review without editorial oversight. In fact, an estimated 36 million reviews already exist on the site. And although reviews may have the power to inflict harm on businesses, the public may be cynical about the veracity of any particular individual’s recitations of "facts."

Professor Eric Goldman, a frequent legal commentator and director of Santa Clara University School of Law’s High Tech Law Institute, subscribes to this view. "Any individual review is not credible, but the aggregate effect of the reviews … tends to paint a pretty accurate picture," Goldman told NPR. Likewise, Gawker.com, a media website that has itself been embroiled in a number of high-profile online defamation cases, had a more humorous take on the Brompton court’s decision when it published a post titled, "Hilarious Yelp Review Helps Cement Precedent of Not Taking Internet Seriously."

Efforts to remove a particularly salacious post may also be stymied by constitutional protections afforded anonymous posters. For example, in Thomas M. Cooley Law School v. John Doe 1, 2013 Mich. App. LEXIS 610 (Mich. Ct. App. Apr. 4, 2013), the Michigan Court of Appeals reversed a trial court’s decision to deny a protective order seeking to keep Doe 1′s identity secret after finding his criticisms of Cooley (such as calling it "one of the three worst law schools in the United States") under the pseudonym "Rockstar05" constituted defamation per se. Relying on the First Amendment and the Michigan Constitution, the Cooley court reserved and remanded to the lower court. It then instructed the trial court to consider whether Michigan law did, in fact, entitle Doe 1 to an order protecting his identity.

Businesses have also had little success in suing user review websites like Yelp directly. As mere public forums, Section 230 of the Communications Decency Act generally protects such sites from individual liability based on user content.

This is not to say that businesses have been entirely unsuccessful in pursuing online defamation claims, however. Courts seem to be more willing to entertain such claims outside the user review context. For instance, if a scholarly journal with a rigorous publishing process posted an allegedly defamatory article on its website, a court may be more receptive to such a claim based on a perceived notion about the journal’s credibility.

Even with respect to online review sites, some businesses have been able to go after individual users. In Virginia, for example, a contractor survived a motion to dismiss and is currently proceeding to trial against a user who noted the contractor stole her jewelry in a review published on Angie’s List (a Yelp-like website that allows users to rate contractors).

In light of the perceived cynicism regarding anonymous user reviews, businesses will likely face an uphill battle in proceeding with defamation claims absent a demonstrably false assertion of fact. And, even then, courts still consider whether the medium itself could make the difference in imposing liability. •

Jeffrey N. Rosenthal is an attorney with Blank Rome. He concentrates his practice in the areas of complex corporate and commercial litigation, specializing in cases involving technology. He can be reached at rosenthal-j@blankrome.com.

Louis A. Abrams is an attorney with the firm. He concentrates his practice in the areas of software protection, mass tort litigation and environmental compliance. He can be reached at abrams-l@blankrome.com.