While the Communications Decency Act can protect an online-review site like Yelp from libel-liability, a recent California opinion made it clear that tenants can find themselves liable for libel for untruthful reviews.

In the opinion, the defendant appealed from an order denying his special motion to strike a libel claim under Code of Civil Procedure section 425.161 (California’s anti-SLAPP statute). The claim stemmed from a negative review of an apartment building :

[the tenant/Defendant] posted to Yelp, an Internet Web site. [The tenant] asserts his review is mere opinion or, alternatively, substantially true and, therefore, non-libelous. While many Internet critiques are nothing more than ranting opinions that cannot be taken seriously, Internet commentary does not ipso facto get a free pass under defamation law. [The tenant's] review, in part, is susceptible to being read as containing factual assertions, not just mere opinion, and plaintiffs submitted sufficient evidence to meet their minimal burden under the anti-SLAPP statute to show a probability of prevailing on at least some aspect of their libel claim. We therefore affirm the order denying Papaliolios‘s special motion to strike.

Some of the reviews, juxtaposed against sworn declarations submitted by the Plaintiff, paint an interesting he said-she said picture. According to the reviewer “the Building is (newly) owned and occupied by a sociopathic narcissist‖” – yet the owner submitted a declaration stating he had not been diagnosed with either condition, taking the claim rather literally as opposed to in the colloquial insult-sense. The reviewer also accused the landlord of contributing to the deaths of several tenants, and evicting a number of tenants, where the landlord submitted declarations refuting both of these claims.

The SLAPP analysis under California law is a pretty simple two-step. The first is determining whether the challenged cause of action (here, the libel claim) arose out of a protected activity (here, the Yelp reviews). The parties agreed that the libel claim arise out of the Yelp reviews, which everyone agreed was a protected activity- a free-speech no brainer.

The second step is determining “whether plaintiffs carried their burden of showing a probability of prevailing on the merits of their libel claim[,]” in which the Court had to engage in a de novo analysis of whether the landlord had a fair shot at winning the libel suit. The Court reasoned that

To be libelous, “a statement must contain a provable falsehood” and, to this end, “‘courts distinguish between statements of fact and statements of opinion for purposes of defamation liability.’” . . . Not all statements that appear to be opinions, however, are immunized . . . the United States Supreme Court moved away from the notion that defamatory statements categorized as opinion as opposed to fact enjoy wholesale protection under the First Amendment. Significantly, the court recognized that “expressions of ‘opinion’ may often imply an assertion of objective fact.” . . . The court went on to explain: “If a speaker says, ‘In my opinion John Jones is a liar,’ he implies a knowledge of facts which lead to the conclusion that Jones told an untruth. Even if the speaker states the facts upon which he bases his opinion, if those facts are either incorrect or incomplete, or if his assessment of them is erroneous, the statement may still imply a false assertion of fact. Simply couching such statements in terms of opinion does not dispel these implications . . . .” Thus a false statement of fact, whether expressly stated or implied from an expression of opinion, is actionable. . . .The key is not parsing whether a published statement is fact or opinion, but “whether a reasonable fact finder could conclude the published statement declares or implies a provably false assertion of fact.” . . . For example, “an opinion based on implied, undisclosed facts is actionable if the speaker has no factual basis for the opinion” but “[a]n opinion is not actionable if it discloses all the statements of fact on which the opinion is based and those statements are true.”

The opinion analyzes each of the statements made by the tenant, and concludes that yes, they could have crossed the line. Interestingly, the tenant argued that posting on an Internet site under an assumed name implicitly created a context where his statements couldn’t be taken seriously as “Internet fora are notorious as ‘places where readers expect to see strongly worded opinions rather than objective facts,’ and that ‘anonymous, or pseudonymous,’ opinions should be ‘discount[ed] . . . accordingly.’”

The Court rejected this can’t-take-anonymous-posts-seriously argument, holding that “the mere fact speech is broadcast across the Internet by an anonymous speaker does not ipso facto make it nonactionable opinion and immune from defamation law.” The opinion has an in-depth analysis and is worth a read in full if you have interest in the issues.

So what is a landlord to do to protect themselves from this kind of nuisance tenant? Even if you can win in a libel suit, the situation is less than ideal- lawsuits are expensive, and suing each time a tenant posts something on Yelp is not very cost-effective. Or what to do when tenants post negative reviews, and try to leverage these negative reviews into a rent deduction?

One novel approach could be to turn the libel issue into a copyright issue- by potentially requiring tenants to assign the copyright in any social media reviews. How about using the below language in lease agreements?

each Tenant hereby assigns and transfers to Owner any and all rights, including all rights of copyright as set forth in the United States Copyright Act, in any and all written or photographic works regarding the Owner, the Unit, the property, or the apartments. This means that if an Tenant creates an online posting on a website regarding the Owner, the Unit, the property, or the apartments, the Owner will have the right to notify the website to take down any such online posting pursuant to the Digital Millennium Copyright Act. You further guarantee and warrant that you will indemnify, make good and hold the Owner harmless from and against any and all loss, damage, cost, legal fees, recoveries, judgments, penalties and expenses which may be obtained against Owner by reason of your assignment to Owner.

Draconian, or necessary in the age of libeling Yelpers? And would a clause like this be effective, requiring the online review site to take down the review immediately under the DMCA take down provisions? You tell us- comment away!