E-Alert Case Updates
Virginia sets standard for piercing online anonymity
Yelp, Inc. v. Hadeed Carpet Cleaning, Inc.
The Virginia Court of Appeals set the evidentiary standard for piercing the constitutionally protected anonymity of reviewers when they are alleged to have defamed a company in an online review.
Hadeed Carpet Cleaning, Inc. (“Hadeed”) brought suit against seven (7) unidentified individuals (“Reviewers”) for defamation, based on negative reviews of its services submitted through the social media website, owned and operated by Yelp, Inc. (“Yelp”). Hadeed claimed that it could not correlate the reviews with any of its customers, and therefore, the reviewers were likely defaming Hadeed’s business, as the Reviewers claimed to be customers. In order to obtain the identities of the Reviewers, Hadeed subpoenaed the registration information from Yelp, a non-party, which required users to provide certain contact information in order to create an account prior to posting reviews. Yelp refused to comply with the subpoena, even after a court order. Yelp was thereafter held in contempt for failing to provide the information and sanctioned. Yelp appealed the contempt order.
The Court acknowledged that statements made under anonymity were protected by the First Amendment. “[T]he anonymous speaker has the right to express himself on the Internet without the fear that his veil of anonymity will be pierced for no other reason than because another person disagrees with him.” The Court noted, however, that the protections afforded by the First Amendment were not absolute. If the statements were not lawful, the protection of the First Amendment did not apply and the Reviewers anonymity could be pierced. “Our constitutional guarantees of free speech, as we have seen, protect expressions of opinion from action for defamation. Those constitutional guarantees have never been construed, however to protect either criminal … or tortious conduct.”
In determining whether the Reviewer’s statements were lawful, the Court outlined the elements necessary to prove defamation: (1) publication of (2) an actionable statement with (3) the requisite intent. Defamatory words that cause prejudice to a person in their profession are actionable as defamation per se. While pure expressions of opinion are protected, statements of fact made to support or justify an opinion can form the basis of an action for defamation.
As a matter of first impression, the Court reviewed the standard required to demonstrate the necessity to pierce the veil of anonymity. Yelp argued that Hadeed should be required to show merit on both the law and facts before the anonymity would be pierced, but the Court held that the Virginia Legislature had already laid out the proper unmasking standard in VA. CODE § 8.01-407.1. The unmasking standard require that the requesting part show that:
The subpoenaed party may not comply with the subpoena earlier than three business days before the date on which the disclosure is due, to allow the anonymous party the opportunity to object to the disclosure. The Court held that the procedures set out in VA. CODE § 8.01-407.1 were not unconstitutional.
The Court then held that that Hadeed had complied with the requirements of the statutory unmasking procedures and had demonstrated that if the Reviewers were not Hadeed customers their statements were defamatory. “[I]t established that it had no record of having provided services to the posters” after having conducted a “thorough review of its customer database to determine whether all the Yelp reviews were written by actual customers,” and not being able to match the Reviewers with any customer files.
The Court also rejected Yelp’s argument that it was not subject to jurisdiction, as it was an out-of-state corporation, noting that it maintained a resident agent in Virginia, thereby providing jurisdiction. The Court affirmed the decision of the trial court.
Judge Haley, concurred in part, agreeing with the standards stated by the majority. Judge Haley, however, did not agree that Hadeed’s self-serving testimony that the reviews could not be matched with customers was sufficient to meet the unmasking standard and overcome the constitutional protections, especially where Hadeed had conceded that it could not affirmatively state that the anonymous Reviewers were not customers.
|©2008 Maryland Defense Counsel, Inc. All Rights Reserved.|