Two recent defamation cases highlight the risks involved in suing former customers or clients for defamation based on the posting of negative online reviews on Internet review websites such as AngiesList.com and Yelp.com. Not only does a defamation claim run the risk of igniting free speech concerns in the context, but filing a weak claim could expose a company to liability in states that have strong anti-SLAPP statutes.

In Perez v. Dietz Development LLC,1 the Virginia Supreme Court vacated a trial court’s preliminary injunction against a homeowner who had posted harsh reviews of a home improvement contractor on AngiesList.com and Yelp.com. See No. 122157 (Va. Dec. 28, 2012). In late October, contractor Christopher Dietz filed a defamation lawsuit against a former client in Virginia Circuit Court, seeking $750,000 in damages. The homeowner, Jane Perez, had posted a number of scathing online reviews accusing Dietz of damaging her residence, stealing her jewelry, and employing deceitful billing practices. On December 7, 2012, the Circuit Court judge issued a preliminary injunction requiring that the defendant delete the critical comments she had made in her reviews, with the exception of those comments specifically related to Dietz’s work on her residence.

Shortly after the Circuit Court’s ruling, both the Public Citizen Litigation Group and the American Civil Liberties Union of Virginia joined Perez’s legal team and appealed the court’s order to the Virginia Supreme Court, arguing that a preliminary injunction against alleged defamation amounts to an impermissible prior restraint, in violation of the First Amendment. On December 28, 2012, the Virginia Supreme Court appeared to agree, issuing a brief order vacating the injunction but stating simply that the injunction “was not justified and the respondents have an adequate remedy at law.”

In Rahbar v. Batoon, the California Supreme Court declined to revive a dentist’s lawsuit against a patient who had posted a negative online review on Yelp.com. See No. S206889 (Cal. Jan. 3, 2013). The patient, Jennifer Batoon, posted her critical review in August 2008, writing “DON’T GO HERE. MOST PAINFUL DENTIST EVER.” and voicing her displeasure with her dentist’s treatment choices, billing practices, and communication skills. In September 2009, the dentist, Gelareh Rahbar, sued her former patient in San Francisco Superior Court, pleading claims of defamation and invasion of privacy based on the Yelp review.

The defendant ultimately moved to strike these claims under California’s anti-SLAPP (i.e., “Strategic Lawsuit Against Public Participation”) statute, which provides “a cause of action against a person arising from any act of that person in the furtherance of the person’s right of petition or free speech . . . in connection with a public issue shall be subject to a special motion to strike, unless the court determines that the plaintiff has established that there is a probability that the plaintiff will prevail on the claim.” See Cal. Civ. Proc. Code § 425.16. The San Francisco Superior court granted the motion and awarded Batoon $43,035 in attorney fees. Rahbar did not appeal this decision, but instead filed a second lawsuit in August 2010 based on Batoon’s 2008 Yelp review. Again, the defendant filed an anti-SLAPP motion, and the court ruled she was entitled to fees. The plaintiff appealed this decision, and in October 2012, the California Court of Appeal affirmed the trial court’s grant of the special motion to strike and award of attorneys fees to the defendant. See Rahbar v. Batoon, No. A132294 (Cal. Ct. App. Oct. 16, 2012). On January 3, 2013, during its weekly meeting, the California Supreme Court rejected, without comment, Rahbar’s request to challenge the award.

The advent of the Internet has created a new forum for customers to chronicle their purchasing experiences or express their feelings toward service providers, and, in many cases, companies may feel that former customers have been unfairly, or deceptively, critical of their goods or services. Nevertheless, companies should tread carefully when considering legal action against former customers or clients who post unfavorable reviews on the Internet, especially in states like California that have strong anti-SLAPP statutes. In this context, rushing into court can result in an embarrassing defeat, or worse, costly awards under a state’s anti-SLAPP statute.