Ultimate Legal Breakdown: Negative Online Reviews [e288]

Full Podcast Transcript

NASIR: Welcome to our podcast!
My name is Nasir Pasha.

MATT: And I’m Matt Staub. We’re two attorneys here with Pasha Law.

NASIR: This is where we cover business in the news with our legal twist.
Today, we’re covering the ultimate legal breakdown of online reviews – something that we’ve dealt with a ton with our client businesses, right?

MATT: Yeah, probably more than I was expecting to ever but we’ve had clients where that’s been the only thing that’s been an issue. But, even for the clients that we do a lot of things for, it seems to be popping up with them as well, and I’m sure most people have, if they haven’t left their own reviews, they’ve at least used something like a Yelp or Google Reviews to at least look into something such as a restaurant or something else like that.

NASIR: Yeah, and I think early on in the internet, especially with the online reviews, most of the issues were dealing with businesses that deal with consumers. But, now, even B2B businesses, service industry, pretty much everybody has some kind of online profile where people can leave reviews – whether by choice or not, sometimes, profiles get created whether you like it or not.

MATT: Right. I’ve talked to a lot of different business owners who were confused how their Yelp pages even showed up. “I didn’t create this!” Well, it doesn’t really matter. They’re like, “Well, we can’t create my own page.” It’s like, well, good luck with that argument to Yelp.

NASIR: Yeah. And so, Yelp is a great example of online reviews. In fact, I would say that that’s 80 percent of our business – people complaining about Yelp reviews – and then, 20 percent everything else. It’s one of the most popular ones. In particular, a negative review on Yelp seems to have the most impact. But, also, there’s Ripoff Report. I know, if you get a bad review on Ripoff Report, depending upon how strong you are on the web, that can come up pretty high in the search engines if they search your business.

MATT: Yeah. Of course, it depends on the business. Sometimes, you type in a business’ name, it might be a whole bunch of things, and then their Yelp page. If you type the name in the right fashion, if you have a Google business page, it’ll pop up on the right. Reviews are right there, But, yeah, like you said, Ripoff Report, that can pop up really high on a search engine. It’s never anything good. Ripoff Report is only posting bad things so that’s going to be some bad news for your business.

NASIR: What’s different about Ripoff Report versus Yelp, on Google especially, Ripoff Report, in their title tags, they’ll put the actual title of the review. And so, unlike Yelp where it may show how many stars, et cetera – which may be negative – but, if they have something scathing like, “Oh, this business is a fraud,” or fraudulent or whatever, that will be what it says in the actual Google result which can be very, very damaging. But is it enough just to be a bad review to have legal action? Probably not. I mean, a true review that is bad has very little recourse, actually.

MATT: Yeah. To me, there’s different levels of “bad reviews” or one-star reviews. You have the ones that are – perfect example – you go to a restaurant, it was a terrible experience – bad service, food was bad. If you go on there and write completely truthful things about that experience, that’s just a legitimate bad review. And then, there’s ones where someone might leave a review, it’s more opinion-based or they just didn’t like the ambiance of a restaurant or something to that effect, it’s not really a factual thing, it’s just their opinion and they leave a bad review for that. I’ve seen that, too. And then, of course, you have kind of the all-encompassing one and this is what we’re going to get to but the review that leaves statements of fact that are false. Basically, you’re going on there saying statements that are definitely false and that are not opinions. Those are going to be the ones that some action can be taken on because those fall under defamation.

NASIR: Yeah, and there’s a reason why defamation is defined that way and where they draw the line and that line is drawn in connection with freedom of speech. And so, the First Amendment draws that line between what is allowed speech and what is not allowed speech. Defamation is just that that we’re willing to protect speech that is a matter of opinion. But, if you’re just stating a statement of fact that’s not true, that’s where we give plaintiffs some recourse against defendants.

MATT: Exactly. So, that’s where all analysis starts. If you get a bad review for your business, the first thing to do is to read the review and determine whether you even have a cause of action. From there – let’s say you do – then you kind of run through this step-by-step process of how to deal with it. I think the first thing to do is determine what the response is for the actual review – meaning, do you want to write something? In Yelp, for example, you have the opportunity to respond, and in Ripoff Report, too.
Do you want to respond to the review or do you not? If not, do you want to take other course of action? I mean, oftentimes – or almost every time – at least I tell business owners to not respond to the review. Sometimes, they’ve already done so and made it worse. But I think that’s the first step.
Don’t just jump in and write something and try to plead your case. You need to step back a second and take some time to think about the proper response.

NASIR: And that might be counterintuitive. In fact, that’s often counter-advice to a lot of marketers or reputation management companies because they definitely think that there is a positive aspect of putting your position out there. Whether it’s on TripAdvisor or Yelp, you’ll have restaurants that respond to even solid criticism. Even where it’s kind of outrageous, they have some kind of response. I’m not saying that’s not okay. There’s definitely a reason, a valid argument to do it that way.
What we’re talking about is don’t be the owner that has a knee-jerk reaction because you are personally involved in this situation and you make matters worse. We’ve seen it a hundred times. In fact, in worst case scenarios, the response ends up being more of a story than the actual bad review. We’ve talked about that in the past as well.

MATT: Definitely. And so, to me, there’s only a few times when it makes sense to leave or to have a response. I think the one you just said, if it’s a truly factual review that’s just based on a bad experience they had, you might offer an opportunity for them to reach out to you, I’ve seen that and I think that’s a good way to go about it. We’ll get into more detail. But, sometimes, if you have to go the route of trying to subpoena a review site and determine who this person is, sometimes, you have to write a response before they’ll comply with the subpoena. We’ll talk about that in particular but, yeah, most of the time, our advice is going to contrary or counter to what reputation management companies, et cetera, are going to say because we want to take a step back and go another route.

NASIR: Yeah, which is natural because, when you’re coming to us, it’s at a point where (1) the review is so damaging that it’s affecting your business or you anticipate that it’ll affect your business and (2) you feel that this person is being blatantly false in their review and that’s usually an indication that you being nice to them is not going to end a result.
So, after we review the response and it meets that criteria, then going to a law firm like ours – or whoever else – to help you guide you through the next step is going to be important. If you’ve already responded or engaged with the reviewer, it actually may affect the chances of success and them actually removing the reviews because, when we send our cease and desist letters – which we’ll talk about in a second – the majority of the time, people remove the reviews. There’s a reason for that. You know, we can talk about that in a second.

MATT: Yeah, you’re exactly right, and I’ve dealt with the former of that of somebody, you see, they get a bad review, the business owner responds, and I’ve seen ones that are even worse than the bad reviews and they’re disclosing private or confidential information. It’s just really bad. So, yeah, this an analysis to go through. Determine that it is defamatory. So, we’ve done that.
To me, the next step is – do we know who this person is? Much easier said than done if you do. You just alluded to the cease and desist letter. That’s one way to go about it but we’ve got to determine if we know who this person is or at least at the beginning, if there is reasonable certainty or a pretty good idea of who this person is because that’s going to dictate the route that’s going to need to be taken.

NASIR: Yeah. If we don’t know who they are, then there’s one option. If we do know who they are, there’s another option.
Let’s talk about, if you know who the reviewer is, usually, the first step is to send a cease and desist. Any lawyer can draft one of these. Like I said, just to kind of brag about ourselves, we really dive into the details of the review and the business to have an understanding, to make our letter as effective as possible. We have a reputation as a firm that we actually go after reviewers when it makes sense. Because of that reputation, usually, reviewers do listen to us – again, majority of the time. Those that don’t end up being forced to do so one way or another.

MATT: Right. We’re not going to send a cease and desist letter if there’s no merit behind it. I mean, sometimes, people ask us to. Like I said, there has to be some grounds to do it. You have to be able to prove some sort of defamation or reasonable belief that there is.

NASIR: That’s what makes this effective. If we were to take every single case, then we would lose our credibility and it wouldn’t make our letters as effective.

MATT: Right. I’ve turned down handfuls of people that wanted to go that route and do something. I just told them, “Look, if it’s true, there’s not much you can do.” One defense – probably the biggest defense – to defamation is truth.

NASIR: That’s right.

MATT: If the review is true, no matter how bad it is, it’s not defamation. That’s as simple as it gets.

NASIR: Going back to defamation, sometimes, people get confused with the difference between a matter of opinion or statement of opinion and a statement of fact.
Just to quickly give an example of that, to exaggerate a little bit, if I say that this restaurant is not good – it’s bad – or the owner is a jerk or the waitresses are rude, these are all very kind of opinionated-related statements. I’m not saying an opinion by itself is not actionable because sometimes they are if they imply some kind of underlying fact that’s not true. And so, a clear example of a statement of fact is, instead of saying that the waitress is rude, I would say, “The waitress threw water in my face.” That would be the difference.
If I say that the business owners are corrupt and they are cheating, that may actually have an implication that they’re actually breaking the law even though that’s on the side of the opinion but it may be indication that there’s underlying fact that is also not true.

MATT: Yeah. A lot of times, it kind of is in that grey area. Like you said, we have some backing to these letters. Really, the reason we often start with this or to go this route is, for anyone that’s been involved in a lawsuit, I mean, once a lawsuit is filed, it’s going to get much more expensive for the business owner because we just don’t know what direction it’s going to go.
Let’s say we have the situation where we’ve tried other things, nothing works. Really, what’s left is to file a lawsuit. You know, I don’t like to say it’s a last option but that’s really – to us or at least to me – I think it’s the last line of defense but it’s there.

NASIR: And you have to be careful. If you’re pulling that trigger, of course, there’s costs involved. But a good example – and just in Houston, my hometown here – there was a law firm that actually sued a client because of some one-star review. A law firm – they know what the definition of defamation is, et cetera. Long story short, not only did they lose the lawsuit but the judge actually awarded the defendant, the former client, attorney’s fees and I don’t know how much it was but it was enough, the fact that they lost and now they actually owe money. And so, there’s no guarantee to all this. That’s why competent attorneys that just don’t push you into spending money that might be not gotten back and then, not only that, you actually may lose money and – not only that – not everybody wants to sue their customers. There are real repercussions – even if you’re right – in suing your customers.

MATT: Yeah, we’re talking about the legal side of things but, exactly what you just said, some of this is a public relations argument as well. Even if you have a great case, does it always make sense to actually file a lawsuit against one of your customers? Because then, it’s just going to be out there and people will say, “I don’t know if I want to do business with them because they’re just going to sue me. I’m just a customer and they’re going to sue me? That’s not what I want to do.” Of course, it depends on the type of business and all that. You know, just going to what you just said, there is strategy involved in whether to file the lawsuit or not.
I mean, you said in Texas, I know in Illinois, and particularly in California, there’s these tools in the defendant’s toolbelt they can use to basically not quash but more or less that’s what it is, this lawsuit before it even gets to that point. Like you said, there’s attorney’s fees, sanctions that could be involved in this case in Houston. $27,000 in attorney’s fees for the defendant here. They didn’t even get to the heart of the actual defamation. I mean, I guess they did indirectly but this was just at the beginning.
You can’t just immediately file a lawsuit and work it out from there – at least in California. It’s not really backing out of these either if the defendant turns around and files this motion against you. It is careful now. Just like at the beginning, even though you might want to respond to them to the review, it’s the same thing for filing a lawsuit. You want to think before acting.

NASIR: I think what you’re referring to is the anti-slap motion and not every state has it and to a certain degree may be more effective than others. But, yeah, it’s definitely good to note. Again, not every attorney is going to be competent enough unless they’re experienced in this area, specifically in defamation law, to be able to go through this analysis.
Now, when you sue customers, yeah, you can sue them for money damages, damages that have been caused against your business, to your reputation. But, typically, what most businesses are seeking is just to have the review taken down.
A lot of times, customers, clients, no one’s perfect and oftentimes these customers are coming from a place where they did have a bad experience but, because they had a bad experience, they become a little vicious and start exaggerating and going beyond just what’s true and start making defamatory remarks.
But what happens if, even through a lawsuit, you can’t get the review taken down? That happens and a good example is Ripoff Report. Ripoff Report, they basically take advantage of – in my humble opinion – a statute that was passed a while ago – Section 230 of the Communications Decency Act. We’ve talked about this in the past – many times.
What this basically says is that internet websites – like Facebook, Ripoff Report, and Yelp – that rely upon other people’s content that other third parties that are placing the content there, they are not held responsible for that content to a certain degree. Generally, they have immunity. In other words, again, there’s always exceptions but, generally, if someone posts a defamatory statement on Ripoff Report, Ripoff Report will fight to the nail to prevent it being taken down. They say they’ve never lost a case and I’m not sure if that’s still true or not. I’m sure they have by now. There are some exceptions, I’m sure, but I don’t know that for a fact.
And so, oftentimes, the result is not taking the review down from Ripoff Report because, even as a user, when you draft the complaint, you can’t even take it down if you wanted to. It’s there permanently. You can actually get it removed and de-indexed from Google and that’s been an effective way by many law firms including ours to get those reviews removed.

MATT: Even in those situations, you should go through and look to see what Ripoff Report writes on the site. They just kind of belittle the legal process. We can probably find one to post maybe to show people.

NASIR: We can link to it, at least.

MATT: Yeah, that’s what I meant. What I describe to people is they’re a whole different animal just because they refuse to really do anything. I alluded to it before, their subpoena process is much more burdensome than any other site that I’ve dealt with. And so, it’s not really that fun to deal with them but it’s doable. Like you said, there’s always remedies to be sought by a defamed business or person.

NASIR: What’s crazy is that they make money off of this. They make money off of this statute because, when people leave bad reviews and they, again, fight vehemently and anyone that tries to take it down, because of that statute, they’re able to protect themselves. They actually charge – I don’t know what they’re calling it these days and I don’t want to defame them because I’m intelligent in that way because they’re very litigious but, nevertheless, they have some kind of program where you pay money. My understanding is that the ultimate result is that, you know that title tag that I alluded to in the very beginning, it somehow gets changed and you get into some kind of program or whatever. But whatever it is, somehow it ends up being more beneficial. But it’s very expensive and very expensive for small businesses. Most small businesses can’t afford whatever the payment is. The last time I checked, it was definitely in the thousands of dollars, right?

MATT: Yeah, and I thought it was… I just spoke to somebody about this. I thought it was ongoing, too. There’s an upfront fee – like set things up and then you pay an ongoing whatever.

NASIR: It’s highway robbery. I mean, they’re really holding them hostage, especially if it’s a defamatory statement because, here’s the thing, even if it’s clearly a lie, that means that they can take advantage of this. There’s something inherently wrong with that, for sure. But it’s not to say that that’s the only option that you can just pay the ransom. There’s other ways to do it.
For example, if you get a court order, if it’s drafted correctly – and this is a key point because I’ve seen court orders that aren’t drafted correctly because the lawyers may have made a mistake here or there but if you draft it correctly – you can get it removed off of Google – assuming that you’re able to prove defamation, there are many methods and you can get it removed. Now, what Ripoff Report has done is that, since you have to identify the URL of the actual website in the lawsuit for Google to remove it, Ripoff Report will actually change the URL of the website with the bad review in order to get around Google indexing. And so, Google actually – and this is a more recent thing and only in the last six months or so that I personally have seen it and they may have been doing it before then – Google has responded and they will still take it down if your judgment is drafted well enough in the sense that, if it’s such the case that it’s one specific URL and it’s kind of a narrow vision, then you may have some problems because Google will not comply with the court order unless it’s properly drafted and they do review it. it’s hand-reviewed. In fact, once you put it in, it’ll actually take a number of days for them to actually process it because it’s done by their legal team.

MATT: Fun stuff. Let’s go on the other side of the coin.
We talked about when you can identify who the bad reviewer is. What about in the case of the anonymous reviewer? It’s a different procedure at that point.

NASIR: It’s tough. If you do not know who they are, then it’s like, “Who do you sue? Who do you send the letter to?” Of course, a lot of these anonymous reviews are sometimes your competitors, they could be your next-door neighbor that hates you, it could be an ex-girlfriend or ex-boyfriend. I mean, it could be anybody that has some gripe against you and what can you do?

MATT: Yeah, and I’ve seen all those, especially when they have specific facts of their experience, the business is going to know whether it was a real person or not. It’s usually somebody that just doesn’t like you or a competitor or a former employee. That seems to be what most of them are.
On Yelp, for example, you can post anonymously. I guess on all these sites.

NASIR: Yeah, you can make up a name.

MATT: You can make up a name. With Yelp, you do need a first name and last initial but Ripoff Report, you can write whatever.

NASIR: Our firm had one from an opposing party back in the days when we were representing homeowners who were defrauded by some various loan modification companies. One of them actually got so upset at us that they started leaving some unbelievable reviews, of course. We got it removed, of course. You know, that’s what happens.

MATT: With this, like you said, if it’s anonymous, we can’t identify. Really, what you’re left with is filing a lawsuit and hoping that you can determine who this person is by subpoenaing the site. Like we were saying before, Ripoff Report makes you go through their own process. I mean, there’s rules. Yelp, for example, has their own rules on going about it as well. But just drafting and serving the subpoena is easier said than done.

NASIR: Yeah, and there’s a mixed level of results on that, depending upon who you’re subpoenaing. Ripoff Report admittedly is probably the most difficult but other companies like Yelp have fought pretty hard as well to keep their users anonymous when it’s in their favor and there’s been mixed court results in that regard. And so, it’s very fact-specific, very jurisdiction-specific, and is again admittedly a very tough nut to crack.
But one thing that’s interesting, we’ve been relatively successful despite the anonymity of certain reviews of being able to uncover the identity – you know, with our various investigative tools. I mean, sometimes, I’ve got to admit, it’s a little bit of luck, you know?

MATT: Yeah. You know, it can be and you kind of hope that you’re able to determine it through one of those avenues. If not, you’re looking at, for example, there’s this case of this money manager in Manhattan, basically went through the same thing. This unidentified person was blasting them with these bad reviews that were defamatory. They were actually able to subpoena and get the ISP addresses of the person but it didn’t really tell them much.

NASIR: Yeah, sometimes, IP addresses are not enough. Even if you know the exact household that it was in, that may not be enough in a court of law for proof. You need some kind of supporting evidence, especially if it’s like in a public Wi-Fi or something like that, you’re even less likely to have anything.

MATT: So, what about this? This is like the conversation I have with business owners. What do I want to do now that I’ve got these bad reviews? I’m going to go back to my contracts and add some sort of provision in there that people can’t leave bad reviews about me. Is that going to solve the problem?

NASIR: You know what? We get this question all the time and it’s called a non-disparagement clause. For the most part, it depends which contract you’re putting it in and what kind of contract because there are federal statutes and state statutes that basically prohibit these kinds of clauses. What they basically say, there’s different variations of non-disparagement clauses, to kind of dumb it down a little bit, make it simplified at least, it basically says that during the term of the agreement and thereafter, either party – usually it’s both – either party will not disparage or speak publicly in a negative fashion about the other party. Sometimes, it’s general; sometimes, it’s specific. That’s called a non-disparagement clause and sometimes it’s prohibited.

MATT: Yeah, and a couple of things with this. There’s state laws. Like, California, theirs is pretty strict. There’s also one that kind of is federal, right?

NASIR: Yeah, the federal law, it’s strict if it meets the requirements. There’s a federal law that was passed. It’s the Review Fairness Act of 2016. But I think it went effective after March of 2017 this year – March 14. These are for contracts that are called form contracts. Now, form contracts under the statute has its own definition. But think about contracts – the ones that no one reads, usually consumer-based – where there’s not really any opportunity or meaningful opportunity for you to negotiate the contract and those are the contracts where, if you put a non-disparagement clause, it’s prohibited.
Also, in non-disparagement clauses, the reason why it’s often scrutinized even without a statute is because it may fly in the face of the First Amendment, especially when it comes to certain protected speech with employees. There’s certain types of people that you should be very concerned about putting any non-disparagement that’s employees. If you are a B2C company, especially if you are a large company and with consumers, be careful with that. But, oftentimes, when you have non-disparagement clauses with other vendors or other partners and these types of agreements, there’s usually less restriction in that regard. I don’t want to make it seem like non-disparagement clauses are illegal and inappropriate – that’s definitely not the case – but there’s a certain slice of the pie that it is prohibited.

MATT: Yeah, and the other thing I was going to say with these too are it’s still relatively new. California in particular, it’s defined in a broad way or it’s spelled out in a broad way so we haven’t really seen these play through the courts enough or any idea how to fully interpret them.

NASIR: Absolutely. I’m just trying to think. We covered a lot.
Usually, when we do these podcasts, I mean, a lot of you have been listening for a while now for a number of years and we definitely appreciate that. As you guys know, I mean, we do this just for fun and we very rarely kind of promote our own services. But I’ve just got to say really quick, just to kind of give our plug, this is an area for which we have a lot of experience in and a lot of other law firms do not. And so, it does kind of differentiate us a little bit.
Typically, what we do is represent businesses. We provide general counsel services to them. But this is a very specific area that we do have a lot of passion for because we understand very well the impact that a negative review can have on a business, especially if you’re a restaurant or even any kind of service industry that has great reviews on Yelp – even one bad review that is not true. When these bad reviews that are false are made, they make it as believable as possible because they know the impact that it has. And so, sometimes, people reading it, even your friends and your family, they may not know that it’s actually not true unless you’re able to respond accordingly, like we discussed earlier, or better yet just get it removed. Sometimes, both is the answer as well.

MATT: Yeah, and one other thing I just thought of is a common reaction or what someone wants to do is like, the only thing they want to do is sue Yelp.

NASIR: Yeah, I forgot about that.

MATT: Yeah, which I need to address that, too. It’s not going to work. They usually say, “Oh, I saw some lawsuit. This person in Virginia…” I think that’s where the case was. This is one that always gets brought up of the person with the rugs, I think, in Virginia. It’s like, “Well, I saw this.” They didn’t win but they sued Yelp, blah blah blah. Yelp’s protected. It’s one thing if they get a court order and they don’t abide by it but, if somebody complains and then this review is defamatory, Yelp’s covered. First of all, they really do have no way of telling 99 percent of the time whether it’s true or not so it’s not going to take sides. Two, they’re covered under the law.

NASIR: And they do have that algorithm that filters reviews but a lot of people complain it filters good reviews and they say it’s an algorithm that we don’t really touch. There’s also allegations against Yelp for them basically extorting businesses to get the reviews changed and so forth, and people who have tried doing that, I still haven’t seen a really successful case where they actually prove that. I’ve heard it many times from businesses and clients, but I’ve just seen how cases have panned out. I haven’t really seen a really great case where they were able to prove that, right?

MATT: Yeah, exactly.
What I always tell people is, “Look, at this stage, it’s not worth your time or your money to sue them. We’ll see what happens down the road.”

NASIR: Let someone else do that – you know, with deep pockets.

MATT: Even if somebody finally was able to do it, they’ll figure out a way to get around this.

NASIR: Exactly. It’s not worth your time. In fact, I’m just thinking about what usually marketers tell us. You have to play the game. Online reviews are part of your brand and part of your marketing strategy. If you spend your time just suing everybody, it’s not a valuable part of your business plan.

MATT: Exactly.

NASIR: All right. By the way, we’re both in San Diego.

MATT: We are.

NASIR: We forgot to mention that at the beginning. Recording the first time – not the first time but recording the first time in a while and in person.

MATT: In person, yeah, quite some time.

NASIR: At least a week.

MATT: Ah, that’s what I was going to say.

NASIR: Okay. Well, we’re spending too much time with each other.

MATT: Still have the same thought of minds.

NASIR: All right. Well, thanks for joining us, everybody. Again, thanks for listening and please review our podcast – we haven’t asked that in a while – on iTunes. Leave comments and, of course, follow us on all our social media which is just exploding nowadays, especially on Instagram – @pashalaw, right?

MATT: Yeah. All right, keep it sound and keep it smart!