Yelp Gets a Pass On Negative Social Media Post

The Fourth Circuit Court of Appeals recently issued a decision having a big impact on how businesses must deal with disparaging commentary on social media.  In Westlake Legal Group v. Yelp, Inc., the court rejected a Virginia law firm’s claim against Yelp complaining about defamatory comments on the firm posted on Yelp’s website.  Yelp asserted that the case should be dismissed, arguing that federal law provided it and other social media companies immunity from such lawsuits.

The Fourth Circuit Court of Appeals agreed with Yelp and dismissed the firm’s case, rejecting the argument that the victim of a false social media post can sue computer service providers.  Citing the Communications Decency Act (‘CDA’), the court ruled that the CDA bars such businesses “from holding interactive computer service providers legally responsible for information created and developed by third parties.”  Basically deeming Yelp an electronic billboard immune for posts that could be defamatory, the court ruled that Yelp could not be sued without facts showing that “that any alleged drafting or revision [by Yelp] … was something more than a website operator performs as part of its traditional editorial function.”

The Westlake decision is significant for several reasons.  It shows that if any individual or business wants to legally challenge defamatory social media, it should ‘keep its powder dry’ and not waste time and money suing the social media company posting the content.  Social media providers like Yelp will likely get a broad pass of immunity for such claims.  Rather, anyone challenging anonymous false statements on social media should focus on so-called ‘unmasking’ cases which could permit subpoenas for business records from the Yelps of the world (such as recently allowed in the Madeed Carpet case) to identify and attack the actual author of the post.  Understanding these rules of the road for challenging disparaging social media can make the difference between protecting one’s reputation and wasting valuable time and money.

Seth Berenzweig is the founding and Managing Partner of Berenzweig Leonard, LLP, and often appears on national media to discuss breaking news business developments.

A License to Libel: Virginia Federal Court Extends Immunity under Communications Decency Act

Today, every business knows how important its online reputation is when it comes to attracting new customers.  With businesses becoming increasingly impacted by online review sites, many have taken to the courts in an effort to protect themselves against negative internet postings. One such advertising company, Directory Assistants, Inc. (DAI) sued its competitor, SuperMedia, LLC, two of its sales representatives, and a district sales manager, for allegedly emailing prospective customers with links to negative and allegedly defamatory postings about DAI on consumer websites, such as ripoffreport.com.

In its recent ruling, a Norfolk, Virginia federal court dismissed DAI’s case on the ground that the Communications Decency Act (CDA) shielded SuperMedia from liability. Section 230 of the CDA provides that “no provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” While many federal courts of appeal, including the Fourth Circuit, have held that the CDA creates broad federal immunity for internet service providers, this was the first Virginia federal case to extend immunity under the CDA to a third party “user” who finds and forwards content posted online. The Court recognized that Congress has granted “anonymous posters on these websites a license to libel people” and that such blanket immunity could have potentially catastrophic consequences for individuals and businesses alike, but concluded that “under the CDA, the Court’s hands are tied.”

Thus, unless Congress amends the CDA, business owners are limited to suits against individuals who actually wrote, created, or developed the allegedly defamatory content. As such, businesses should make every effort to take a proactive approach to improving their online reputation, survey their customers for reviews and honest feedback, and timely respond to any customer grievances.

Author Sara Dajani is an Associate Attorney with the D.C. regional business law firm of Berenzweig Leonard, LLP.  She can be reached at sdajani@berenzweiglaw.com.